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<Research>G Sachs Predicts CN New Housing Mkt Construction Weak in 2026-27; Supply-Demand Imbalance Needs Longer Time to Adjust
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Goldman Sachs released a research report predicting China's construction activity in the new housing market to remain weak in 2026-27 in light of ongoing liquidity pressures and high inventory levels in the real estate sector. Should the absolute level of real estate fixed asset investment reach 85% of real estate sales by 2027, however, Goldman Sachs may observe a slowdown in the current double-digit annual decline trend of real estate fixed asset investment, as this investment mainly reflects real estate sales costs and should account for about 80% of sales in the mid-cycle of the industry. Regarding the secondary housing market, Goldman Sachs anticipates that the supply-demand imbalance will require a longer time to adjust, which will delay price stabilization and affect broader market average sales price trends. As the housing market continues to weaken, Goldman Sachs has noticed two new uncertainties, including whether there is further room to extend the loan terms for developers. The broker also believes credit default risk may further worsen under increasing liquidity pressures. An example of which is CHINA VANKE (02202.HK). AAStocks Financial News |
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